Vietnam's oil imports from South Korea spike after tariff cut

Vietnam recorded an eight-fold jump in imports of oil products from South Korea in the first five months of this year following a tariff cut.

Vietnam halved import tariffs on gasoline from South Korea to 10 percent from 20 percent last December under a free trade agreement between the two countries. The new import tax is expected to remain in place until 2018.

"South Korean gasoline exports to Vietnam are expected to keep rising, driven by the lowered tariffs," energy newswire Platts quoted an official at the Korea Petroleum Association as saying.

South Korean oil refiners are seeking to increase exports to Vietnam as they plan to diversify their export markets, which currently rely heavily on China and Singapore, according to the official.

During the first five months of this year, South Korea's overall oil product exports to Vietnam soared nearly eight times to 6.96 million barrels, compared with 884,000 barrels in the same period last year, according to data released last week by the Korea National Oil Corp.

In May, South Korea exported 2.51 million barrels of oil products to Vietnam, of which gasoline accounted for 72.1 percent of total shipments.

South Korea did not export any gasoline to Vietnam in May last year.

Over the January-May period, South Korea exported 6.03 million barrels of gasoline.

Vietnam has imported 5.4 million tons of oil products in the first five months of 2016, up 27.6 percent on-year, according to customs data.